The Securities and Exchange Commission (SEC ) has brought charges against 26-year-old John Fernandez and his two companies, Avail Progression and Elite Generators, for operating two unregistered and fraudulent forex trading schemes.
According to the official charges filed last Friday, Fernandez and his companies have been accused of defrauding more than 100 investors, after raising over $4.3 million.
Fernandez, a resident of Texas, did not have any professional trading experience. However, he persuaded the victims of his schemes, telling them "he was a trading savant with a proven track record who could guarantee returns up to 100% based on his trading strategies in the forex markets." Like most fraudulent investment schemes, he guaranteed returns for the investors. He provided them with basic offering documents, which mentioned the amount of returns and the dates of receiving the returns.
SEC Takes Down Ponzi Schemes Estimated at $4.3 Million
However, Fernandez did not invest the collected proceeds for trading forex instruments. Instead, he used the money for Ponzi payments and misappropriated it to fund his personal lifestyle. He even made a "litany of excuses" when investors approached him for overdue returns.
He started Avail Progression first and then transitioned to Elite Generators when he ran out of funds in the first scheme. He defrauded investors with both schemes.
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The SEC has now charged Fernandez and his two companies for violating the US securities act's antifraud and securities registration provisions. The regulator is seeking permanent injunctions of the accused, along with civil penalties and disgorgement of ill-gotten gains with prejudgment interest against each defendant. Furthermore, the chargers seek to ban Fernandez from becoming an officer or director of any public company.
SEC Takes Aim at Curbing Ponzi Schemes
Demand in the trading market ballooned in recent years, and so did investment scams. The SEC recently charged eight popular personal finance influencers for their involvement in a $100 million pump-and-dump scheme. Additionally, the watchdog took action against two cryptocurrency Ponzi schemes recently.
Meanwhile, in Europe, the Spanish police arrested a key figure of the brokerage investment platform, EverFX.
